| This is a comprehensive problem all contained on this spreadsheet tab. | |||||
| On 1/1/2015, Starburst Company issued 10-year bonds with a face value of $500,000 at 102. The bonds carry a stated interest rate of 7%, with | |||||
| interest payable semi-annually on January 1 and July 1. Starburst uses the straight-line method of amortizing bond premium or discount. | |||||
| (a) Prepare the journal entry to record the issuance of the bonds. | |||||
| (b) Prepare the journal entry to record payment of interest on July 1, 2015. | |||||
| (c) Prepare the adjusting entry to record the accrual of interest on December 31, 2015. | |||||
| (d) Prepare the balance sheet presentation for the bond on 12/31/2015. | |||||
| (e) Prepare the balance sheet presentation for the bond on 12/31/2016. | |||||